BoE doubles down on signal that rate cuts are far away

The Bank’s decision to leave interest rates at 5.25% for the second time in a row and to double down on the message that rates cuts are far away supports our view that rates will stay at 5.25% until late-2024 rather than until mid-2024 as investors expect. That said, a mild recession in the meantime may mean that rates are cut to 3.00% in 2025 rather than to the level of 4.25-4.50% priced into markets.

We’ll be discussing the latest Fed, ECB and Bank of England policy decisions in a 20-minute Drop-In webinar at 3pm GMT today. (Register here.)